New Mandatory Medicare Payment Models Announced

Summary of New Medicare Payment Models

The Centers for Medicare & Medicaid Services (CMS) published press releases on September 18, 2020, to announce the implementation of two new mandatory Medicare payment models beginning on January 1, 2021. According to CMS-5527-F, the Radiation Oncology Model is designed to “promote quality and financial accountability for providers and supplier of radiotherapy” by providing prospective payments for certain radiotherapy services furnished during a 90-day episode of care for certain types of cancer.

The model will run from January 1, 2021, through December 31, 2025, and is mandatory for all radiotherapy providers and suppliers within selected geographical areas. Payment amounts will be determined based on base rates, trend factors, case-mix, historical experience, and geographic location. Additional adjustments will be made for quality and, beginning in the third year, patient experience.

The End-Stage Renal Disease (ESRD) Treatment Choice Model was also finalized in CMS-5527-F. Its stated purpose is to encourage greater use of kidney transplants and home dialysis to improve the quality of care for ESRD patients, while decreasing Medicare expenditures. Medicare payments for participating ESRD facilities and clinicians caring for patients with ESRD will be adjusted based on the rates of home dialysis transplant waitlisting and the rates of living donor transplants. These payment adjustments will begin on January 1, 2021 and end on June 30, 2027, and will apply to selected ESRD facilities and managing clinicians in randomly-selected geographic areas.

Final Rule CMS-5527-F, which details these changes, is expected to be published in the Federal Register on September 29, 2020, but the unpublished version of the final rule is available for review now.

Radiology Oncology Model

The Radiation Oncology Model is an episode-based payment model for radiotherapy services – rather than the existing fee-for-service payment model that currently exists. Participants in the program include physician group practices, freestanding radiation therapy centers, and hospital outpatient departments within selected geographical regions. Here’s a full list of the affected zip codes. There are several key elements to the program which are discussed below.

Alternative Payment Methodology

Payment amounts are designed to cover all radiotherapy services furnished to a Medicare patient in a 90-day episode. Beneficiaries will be included when they have a diagnosis code of one of 16 cancer types, and receive radiotherapy services from a participating provider or supplier in one of the selected geographical regions.

Payments have been adjusted to be site neutral; that is, payment amounts will be the same regardless of the care setting in which the services are provided. The episode payments are, however, split into professional and technical components to allow for processing by existing claims systems and to provide consistency with existing business relationships.

Professional participants will be those clinicians who furnish the professional component of radiotherapy services at either a freestanding radiation therapy center or at a hospital outpatient department.

Technical participants will be freestanding radiation therapy centers or hospital outpatient departments who furnish only the technical component of radiotherapy services.

Dual participants will include freestanding radiation therapy centers who furnish both the professional and technical components of radiotherapy services. The table below provides a listing of the 16 cancer types affected along with the applicable ICD-10-CM codes for 2021.

Linking Payment to Quality

The Radiology Oncology Model links payment to quality using a combination of quality measure reporting and outcomes, clinical data reporting, and patient experience. To accomplish this, 2% of the professional component payment and 1% of the technical component payment will be withheld for each episode. Participants will have the ability to earn back a portion of the withheld amount based on reporting and outcomes. Beginning in payment year 1, there are four quality measures that must be reported:

• Oncology: Medical and Radiation – Plan of Care for Pain
• Treatment Summary Communication – Radiation Oncology
• Preventive Care and Screening: Screening for Depression and Follow-Up Plan
• Advance Care Plan

Additionally, participants are required to submit clinical data elements for bone cancer, brain cancer, breast cancer, lung cancer, and prostate cancer on a biannual basis. The required clinical data elements will be provided to participants prior to January 1, 2021. The final component requires that the Consumer Assessment of Healthcare Providers and Systems (CAHPS®) Cancer Care Radiation Therapy Survey be administered starting in 2021 to determine patient experience measures that will be used in program years 3-5.

ESRD Treatment Choices (ETC) Model

The ESRD Treatment Choices Model requires adjustments to the Medicare payments made to selected ESRD facilities and clinicians who manage ESRD beneficiaries. Participants in the program will include ESRD facilities and Medicare-enrolled physicians or non-physician practitioners who furnish and bill the monthly capitation payment for managing one or more adult ESRD beneficiaries within selected geographical regions across the 50 states and the District of Columbia. Download a full listing of the affected zip codes here.

Beneficiaries will be attributed to an ESRD facility on a month-to-month basis according to the facility accounting for the majority of the claims during the month. The managing clinician will be determined to be the clinician who bills the first monthly capitation payment each month.

Two Types of Payment Adjustments

There are two types of payment adjustments that will apply under this model. The first adjustment will be a positive adjustment to all Medicare claims for home dialysis during the first three years of the model, with the goal of encouraging greater utilization of home dialysis services. Specifically, a positive payment adjustment of 3% will apply in calendar year 2021. The rate will drop in subsequent years to 2% in calendar year 2022, 1% in calendar year 2023, and will not apply to claims submitted for calendar year 2024 and later. This positive adjustment will be applied to all ESRD facility claims submitted on Type of Bill 072X with condition code 74 or 76 for beneficiaries who are 18 years or older before the first day of the month during which services are billed. Claims for professional services billed using Current Procedural Terminology (CPT®) codes 90965 or 90966 will also be subject to the uniformly-positive adjustment for patients who are 18 years or older before the first day of the month for which services are billed.

The second adjustment will apply to the per-treatment payment for both home and in-center dialysis claims and may be positive or negative. The amount and type of the adjustment (upwards or downwards) will be calculated as the sum of the transplant waitlist rate and the living donor transplant rate and will be phased in over the performance period of the model. The transplant waitlist rate will mean the rate of ESRD beneficiaries attributed to the ETC participant who were on the kidney transplant waitlist during the model year. The living donor transplant rate will mean the rate of ESRD beneficiaries attributed to the ETC participant who received a kidney transplant from a living donor during the model year.

For facilities, the performance adjustment amount will range from a positive 4% adjustment to a negative 5% adjustment for year 1. The payment adjustment amount will increase over the subsequent years; in years 9 and 10, the adjustment rate will range from positive 8% to negative 10%. For clinicians, the performance adjustment rate will start in year 1 with the same values, that is ranging from positive 4% to negative 5%. By years 9 and 10, the performance adjustment rate for clinicians will range from positive 8% to negative 9%.

CMS continues to focus on decreasing Medicare expenditures while increasing the quality of care received through the implementation of new payment models. We'll continue to focus on alerting you to future programs that will impact your business.

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